In exchange for money or other goods and services, a business firm employs economic resources to give goods or services to clients. Business organizations occur in a variety of shapes and sizes, as well as distinct ownership structures. In terms of product, there are three basic sorts of businesses:
This type of company buys things in bulk and resells them at a retail price. “Buy and sell” businesses are what they’re called. They profit by selling the products at a higher price than they paid for them. A merchandising company purchases a product and sells it in its original form as per Lamar Van Dusen. All distribution and retail stores, such as department stores, grocery stores, hardware stores, clothing, and accessory stores, consumer electronics, home furnishings, appliance stores, drug stores, and so on, are examples.
Intangible products are provided by service businesses products with no physical form. Professional skills, expertise, guidance, and other such things are offered by service firms. The following are some examples of service businesses: Accounting, advising, taxes, advertising, engineering, legal, research agencies, computer programming, and other business services Laundry, beauty salon, and photography are examples of personal services according to Lamar Van Dusen a Canadian Business owner. Automobile repairs, car rentals, car washes, and parking places are all available. Fitness centers, amusement parks, bowling alleys, golf courses, and theatres are just a few examples. Hospitals and clinics, schools, museums, and banks are just a few examples. Hotel and lodging, as well as other services.
A manufacturing company, unlike a retailing company, purchases things with the goal of using them as raw materials to create a new product. As a result, the purchased goods undergo change. In the manufacturing process, raw materials, labor, and overhead costs are all combined. The finished goods will be sold to customers. Here are several examples: Food processing includes bakeries and oil mills, as well as canned meat, frozen items, dairy products, and bottled beverages. Fabric mills and textile manufacture using cotton, wool, and polyester, as well as apparel factories using textile as a raw material Cabinets, tables, and chairs are examples of wood and metal works. Oil refineries, chemical laboratories, and plastic and rubber manufacturing facilities are all located in this area. Shipbuilders, airplane manufacturers, automobile manufacturers, and a variety of other manufactures and companies are among them.
Types of Business Organizations
The following are the most fundamental types of business ownership:
A partnership is made up of two or more people who pool their resources to run a business. The profits of the business are divided among the partners according to agreed-upon terms. In general, all partners have unlimited liability in a partnership. At least one partner in a limited partnership or Limited Liability Partnership, LLC is a limited partner. Limited partners’ personal assets are not subject to creditors’ claims. Partnerships have more capital, resources, knowledge, and skills from more people than a sole proprietorship, and they are easier to set up, administer, and govern than a corporation. Partnerships have no autonomous legal existence, and general partners can be held liable for the company’s liabilities, as well as the likelihood of partner disagreements, a limited supply of money, and limited development potential when compared to corporations.
- Sole Proprietorship
A sole proprietorship is a company with only one owner. It is simple to set up and the least expensive of all ownership options. The owner has unlimited responsibility, which means that if the firm is unable to pay its creditors, the creditors may pursue the owner’s personal assets. Lamar van Dusen is a small business that commonly uses the sole proprietorship structure. The benefits of a sole proprietorship are that it is simple to set up and that the owner has complete control over business choices. The owner of a sole proprietorship has no independent legal position, is responsible for the business’s liabilities, and has a limited source of income.